Weekly crypto market analysis (27 Feb - 05 Mar)

Tradesilvania provides a weekly analysis of the cryptocurrency market.

Crypto Market Evolution

The period of high volatility in the crypto market continued in the most recent week, and the corrections intensified as the news broke about Silvergate Bank having financial difficulties. Silvergate is one of the main banks through which institutional investors run considerable sums on crypto exchanges.

Despite a positive week for stock exchanges, the digital assets market has decoupled from these movements, with most major crypto-assets experiencing declines of between 5% and 10%. Bitcoin has fallen below the $22,500 mark, while ETHER has dropped to almost $1,500, and other assets such as MATIC, ADA, SOL, DOT, and EGLD have seen declines of around 10%.

The collapse of FTX continues to have an impact on major players in the crypto industry. However, it is noteworthy that the news regarding Silvergate’s difficulties did not trigger a market panic, and the declines were not as severe as those seen in similar situations in the past.

In the coming days, several macroeconomic events and data releases, including a speech by the President of the US Central Bank and US unemployment figures, have the potential to impact international financial markets, including the crypto market. It is also important to monitor developments in the Silvergate Bank situation, as the bank is a significant player in the field of crypto investments.

The total market capitalization of digital assets has recently fallen below the $1 trillion mark.

Bitcoin has continued its recent downward trend, depreciating by approximately 5% to around $22,500. This decline has been attributed to news of financial difficulties at the crypto-friendly Silvergate Bank.

Technical analysis indicates that the price has been rejected from a strong confluence area of three key indicators: the 200-week moving average, a long-term trend indicator; the 50-week moving average, an important medium-term trend indicator; and the resistance line marking the recent high of $25,000.

When the price of a financial asset encounters such a concentration of indicators in the same area, it is likely to be rejected, at least in the short term, in the direction from which it came. Thus, the recent pullback of BTC after reaching $25,000 can be seen as a technical rejection.

While the overall direction of the price is determined by supply and demand, as well as BTC’s fundamentals, these indicators help to provide a broader picture of the trend.

If negative news from the crypto industry, such as Silvergate’s difficulties or increased regulatory scrutiny, continues to emerge, we may see further declines. However, if sentiment improves, a return to the $25,000 level and a potential major trend change is possible.

In recent days, ETH has fallen below $1,600, in line with the broader market declines.

From a technical analysis perspective, the Ethereum network’s crypto-asset has been trading in a neutral zone, with the price fluctuating between the 50-week and 200-week moving averages and below the recent high of $1,750.

This uncertainty regarding the direction of ETH can be attributed to investor anticipation of the implementation of the “Shanghai” upgrade. Until there is clarity regarding the fate of the ETH tokens removed from staking as a result of this upgrade, it is uncertain whether they will be sold, creating downward pressure on the price, or whether investors will hold onto the ETHER received from staking, potentially limiting supply and positively impacting the price.

In the meantime, it is likely that ETH will continue to move in line with the broader market.

Despite a recent upgrade to the mobile application of the MultiversX project, the crypto-asset of the Romanian network, EGLD, has depreciated by more than 10% over the past week, falling to $43.

In times of decline in the crypto market, “altcoins” often suffer more significant losses compared to BTC and ETH. As such, eGold has experienced more substantial corrections, with the price briefly dropping below $42, the lowest level in the past 6 weeks.

The support line, representing the previous low, has technically rejected EGLD upwards, and the price is now slightly above $43.

In the short term, continued volatility in eGold is possible, depending on the overall market trend. However, as we have noted in previous reports, MultiversX is a strong crypto project, and for long-term investors, price declines may present an attractive opportunity to accumulate EGLD.

Market moves over the last 7 days

Limitation of Liability

This report issued by Tradesilvania is purely informative and is not intended to be used as a tool for making investment decisions in crypto-assets. Any person who chooses to use this report in the process of making investment decisions assumes all related risks. Tradesilvania SRL has no legal or other obligation towards the person in question that would derive from the publication of this report publicly.

The information in this report was obtained from public sources and is considered relevant and reliable within the limits of publicly available data. However, the value of the digital assets referred to in this report fluctuates over time, and past performance does not indicate future growth.

Total or partial reproduction of this report is permitted only by mentioning the source.